Adobe (ADBE) Stock: Is This 50% Drop a Buying Opportunity?

TLDR

• Adobe’s 2025 advertising budget reached $1.4 billion, up over 30% from the prior year
• The stock has fallen more than 50% since early 2024, recently hitting its lowest point since 2019
• New CMO Lara Balazs is driving aggressive marketing focused on AI-powered creative tools
• Analysts hold a consensus “Hold” rating with price targets averaging $391.81
• Recent Adobe Animate shutdown announcement drew criticism from users

Adobe is opening its checkbook to fight off competitive threats. The creative software company allocated $1.4 billion to advertising in 2025, a jump of more than 30% compared to 2024.

Adobe Inc., ADBE

The spending outpaces major technology companies on a percentage-of-revenue basis. Adobe now dedicates more to marketing than Salesforce, Meta, Netflix, and Uber.

This represents a strategic pivot for Adobe. The company historically relied on product strength and professional networks rather than mass-market advertising.

The shift comes as competition intensifies. Tools like Canva offer simpler alternatives for design work. AI-powered media generators are creating new options for content creators.

Investors have taken notice. ADBE shares dropped over 50% from early 2024 peaks. The stock recently touched $271.02, its lowest level since 2019, before closing at $271.93 on heavy volume.

New Leadership Drives Marketing Overhaul

Adobe appointed Lara Balazs as chief marketing officer to spearhead the advertising expansion. Balazs previously held the same position at Intuit, where she built a reputation for aggressive consumer campaigns.

Intuit dedicates approximately 11% of revenue to advertising, comparable to household names like Coca-Cola and Procter & Gamble. Adobe appears to be following a similar playbook.

Current campaigns emphasize artificial intelligence features. Television commercials demonstrate how Acrobat generates reports and charts using AI. One YouTube video showcases surreal imagery created entirely with Adobe tools, including a dolphin in a hotel pool.

Billboards and Lyft bike advertisements promote Adobe Express with simple messaging. The company is also increasing its presence at film festivals and creative industry events.

Adobe states that Firefly AI tools have generated tens of billions of uses. However, investors question whether this activity will convert to meaningful revenue growth.

To encourage adoption, Adobe is offering unlimited Firefly generations through March 16. The promotion aims to get users comfortable with paid AI workflows.

Analyst Views Remain Cautious

Wall Street sentiment is mixed following recent developments. Semrush shareholders approved an acquisition by Adobe that will add marketing analytics and SEO capabilities.

But other news has weighed on the stock. Adobe decided to discontinue Adobe Animate effective March 1. The announcement triggered complaints from longtime users and raised concerns about customer retention.

Several analysts trimmed their outlook in recent weeks. UBS, Baird, and BMO Capital all reduced price targets. BMO went further by downgrading the stock to Market Perform.

Current consensus shows one Strong Buy rating, ten Buy ratings, eleven Hold ratings, and five Sell ratings. The average price target of $391.81 suggests potential upside from current levels.

Adobe’s most recent quarterly results exceeded expectations. Earnings per share came in at $5.50, beating the $5.40 estimate. Revenue of $6.19 billion topped the $6.11 billion consensus.

The company provided Q1 FY2026 earnings guidance of $5.85 to $5.90 per share. Full-year guidance sits at $23.30 to $23.50 per share.

Operating costs have risen as Adobe invests in growth defense. The gap between gross profit and expenses has narrowed compared to previous years.

Institutional investors control roughly 82% of outstanding shares. CFO Daniel Durn recently sold 1,646 shares at $294.85 each.

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